Social Media and ROI – Does it Have One?

Resistant to taking on this new marketing form, their usual argument is:

“Sure, we’ll use social media if you can quantify its ROI to me.”

Hmm…there lies a problem – how can you work out the ROI of something that doesn’t seem to have one?

Does Social Media have an ROI?

Recently, Finextra’s international series of social media events was kicked off at Thomson Reuters’ London headquarters. A gathering of participants from the financial services industry chewed over the opportunities and pitfalls presented by the likes of Twitter, Facebook and LinkedIn.

A flurry of tweets ensued including one that caught my eye saying “There is ROI in social media, finding it is the Holy Grail!”

In my humble opinion, social media is more about the ROR (return on relationships) than ROI. How can you put a value on the relationships you build with your followers? This revelation then prompted another flurry of tweets between myself Sean Clark, Huw Sayer and Gary Dickenson and prompted Sean’s blog post What’s the ROI on Conversions?.

Sure, you can monitor the work your social media activities generate but that’s not what Twitter is about for me. It’s an incredible tool for communication. By listening to what people are saying you can be there to instantly offer advice when someone needs it. If you monitor it you will get to know when something goes right or wrong with your service so it’s an excellent customer service tool. Not only that but it also helps as part of your SEO strategy.

In short, your ‘ROI or ROR’ will depend on what you’re trying to get out of it. And that’s going to be different for everyone.

What about numbers?

That’s all well and good but there are still a number of CEOs out there that are going to want numbers. So you have to determine precisely what it is you want to get out of your social media strategy.

It could be:

To drive sales

To drive enquiries

Boost brand awareness

Once you know what you’re trying to achieve you can then attempt to quantify your effectiveness.

Maths was never my strong point so I was interested to find a post on Social Media Examiner that addresses this issue.